Diddy Has Accused Diageo of Neglecting His Tequila Brand in Favor of George Clooney’s in a New Lawsuit

Aug 01, 2023

If it really is "all about the Benjamins," as Diddy said in the late ’90s, the rapper thinks that the spirits company Diageo isn't doing enough to help him secure them.

Sean "Diddy" Combs has sued the company for overlooking DeLeón Tequila, the brand he co-owns with Diageo, The Wall Street Journal reported on Wednesday. In a court filing, the music mogul also accuses the company of racial discrimination, saying that it has considered DeLeón a "Black brand."

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In 2013, Diddy and Diageo joined forces to take over DeLeón, which at the time wasn't a very well-known brand, although it sold in some bars for more than $1,000 a bottle. The two had previously worked together to promote Cîroc vodka, a partnership that saw sales of that spirit skyrocket. Diddy, though, is claiming that a very different outcome befell DeLeón, thanks in part to Diageo's lack of investment.

Diddy has apparently been complaining to Diageo about its handling of DeLeón for years. According to the court filing, he's brought up problems such as out-of-stock products, a lack of distribution, a poor redesign of the bottle, and confusing price changes. (Bottles now sell for about $40 to $60, and DeLeón makes up just 0.4 percent of tequila sales, according to an analysis cited in the WSJ.)

Additionally, Diddy has said that Diageo didn't give agave to DeLeón during a shortage of the ingredient in 2020 and 2021. And he noted that the spirits company has continued to heavily support Casamigos, the tequila brand co-founded by George Clooney that Diageo bought in 2017 for up to $1 billion. (Casamigos is the No. 1 U.S. tequila brand in terms of sales, representing 12.6 percent of that market.)

Back in 2019, the Diageo executive Stephen Rust apparently told Diddy that race had played a factor in the company's handling of DeLeón, saying that if he were Martha Stewart, his brands would be distributed more widely. Diddy complained to Diageo CEO Ivan Menezes in 2020, and Menezes said he would work to repair their relationship, according to the court filing.

For its part, Diageo has denied the allegations outlined by Diddy, and a spokesperson for the company told Robb Report that it had treated him fairly. "For more than 15 years, we’ve had a productive and mutually beneficial relationship with Mr. Combs on various business ventures, making significant investments that have resulted in financial success for all involved," the spokesperson said. "We are disappointed our efforts to resolve this business dispute amicably have been ignored, and that Mr. Combs has chosen to damage a productive and valued partnership."

In terms of that partnership, as Diddy once asked, is this the end?

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